Information Week has an article that talks about the difference between the US and European Cloud Computing markets. The article points out to some numbers given by The 451 Group’s William FellowsThe 451 Group’s William Fellows in a “Cloud Outlook 2010” Webcast, says that 57% of spending on cloud computing is done in the U.S., 31% in Europe and 12% in Asia. But when it comes to the adoption of infrastructure as a service, the way to leap the furthest into cloud computing by using Amazon’s EC2 or Rackspace, 93% of that spending is done in the U.S., 6% in Europe and 1% in Asia.
In fact, this matches with the kind of numbers I am getting while talking to vendors from around the world. Couple of months back, I spoke with Christoph Streit, CTO of Scale Up Technologies, on the same topic. He told me that the European market is tough and they are lagging behind US by at least one year.
I asked them about the European cloud market and what kind of traction they are seeing in the market. Christoph told me that they are finding it difficult to convince customers to move their assets to cloud. He told me that they have to put considerable efforts to educate customers about the benefits of cloud computing. In his opinion, European market is lagging behind US market by at least a year on cloud adoption.
In fact, Christoph even told me that they are spending valuable time and resources educating the customers about cloud computing than actually selling it to them. I have spoken to couple of other European vendors and analysts since then and they all share the same opinion about a difficult terrain in Europe. The lack of understanding about the benefits of cloud computing along with a difficult terrain in terms of privacy laws makes cloud computing a tough sell in the market. However, it is possible to overcome the difficulty associated with their privacy laws with the help of an open federated cloud computing ecosystem. Regional players like Scale Up Technologies are playing a crucial role in bridging this gap.
The lack of enthusiasm for cloud computing beyond US is not restricted to Europe alone. As noted by the 451 Group Analyst, Asia is far behind even Europe in terms of cloud computing spending. I am a partner in a Cloud Consultancy firm in India and we are observing the same trend there too. It is tough to convince the businesses about the benefits of cloud computing. Probably it is cultural but they are reluctant to give up their existing infrastructure and move to clouds. There is a long way to go before cloud computing can gain steam in countries like India and other parts of Asia. However, we are hearing from IBM that Chinese government is showing some interest in setting up cloud infrastructure for the consumption of their local governments.
I asked our own Ben Kepes about the status of Cloud Computing in Australia and New Zealand. Since he has been travelling a lot to different parts of Australia and New Zealand running Cloudcamps and talking to both users and vendors, I thought he can give some insight into the trends there. According to Ben, the cloud adoption is very low but some of their big traditional vendors are starting to roll out IaaS offerings. He said he has seen some big companies adopting Google Apps but it is not a widespread trend. He attributes the lack of enthusiasm to poor internet connectivity in that area and the enterprise concerns about cloud security.
In short, cloud computing is a more local trend and we have a long way to go before it becomes an universal phenomena. This also highlights the tremendous opportunities available for more and more players from these countries. As I have always said, we will have an open federated cloud ecosystem in this world and not a handful of monopoly players like some pundits predict. What do you think? I would love to hear from users and vendors in different parts of the world. Please feel free to jump in if you have any comments.
